Oil Will Bottom at $90: Now’s Not the Time to Short Crude, Dicker Says
Oil prices have been falling Tuesday morning on news of resumed talks to curb Iran’s nuclear program. West Texas Intermediate (WTI) sweet crude fell below $95 a barrel by mid-morning.
Last night, however, it appeared that talks had stalled and both WTI and Brent oil closed higher.
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"There were confusing signals coming from the Iran talks at the end of last week, and it's continuing to add volatility to oil markets," Olivier Jakob, an oil analyst at Patromatrix, told Reuters.
Still, there is an overall sense of optimism that a deal will be made with Iran and crude oil supply will increase, says Dan Dicker, senior contributor at OilPrice.com and author of Oil's Endless Bid.
Related: As Syria Turmoil Escalates, Where’s Worry of $200 Oil?
Dicker expects oil prices to bottom at $90 per barrel.
“If this is the bearish model where we’re down to $95, that’s not so bearish," he notes." I’m not ready to throw in the towel and start shorting oil because that’s not a very cheap price... at least historically speaking."
Related: Oil Hits 2-Year High as Strikes Against Syria Expected “Within Days”
The American Petroleum Institute is set to release its report on U.S. crude stocks on Wednesday and the U.S. Energy Information Administration will publish data on Thursday. Analysts are forecasting an increase of 1.6 million barrels, which could put pressure on prices.
The U.S. overtook Saudi Arabia as the world’s biggest producer of oil this October because of a jump in shale output.
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